DUBLIN, Ohio (AP) — Wendy's is planning to sell 640 of its company-owned restaurants to franchisees and will also sell off its bakery operations.
The hamburger chain also announced Wednesday that its first-quarter profit topped Wall Street's expectations as sales improved in North America.
Shares of the Dublin, Ohio-based company climbed more than 5 percent in premarket trading.
Wendy's said it plans to sell about 380 restaurants this year, which includes the previously announced sale of 100 restaurants in Canada. It is looking to sell about 260 restaurants in 2016.
It has about 6,500 franchise and company-operated restaurants in the U.S. and 28 countries and U.S. territories worldwide.
The company said that the planned sale of its bakery operations in Zanesville, Ohio, is targeted to close this month. The chain said that the sale will allow it to concentrate on its restaurants.
For the period ended March 29, Wendy's earned $27.5 million, or 7 cents per share. A year earlier it earned $46.3 million, or 12 cents per share.
Earnings, adjusted for non-recurring gains, came to 6 cents per share.
The results topped Wall Street expectations. The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of 5 cents per share.
The hamburger chain's revenue fell to $466.2 million from $523.2 million because it owned fewer company-run restaurants in the current period. Six analysts surveyed by Zacks expected higher revenue of $478.2 million.
In North America, sales at locations open at least a year rose 3.2 percent. This metric is a key indicator of a retailer's health because it excludes results from locations recently opened or closed.
Wendy's Co. still expects full-year earnings in the range of approximately 33 cents to 35 cents per share. Analysts polled by FactSet predict earnings of 33 cents per share.
Wendy's shares gained 57 cents, or 5.5 percent, to $11.03 before the market open.